Foreign wealth management giants poised to tap China’s US$3.7 trillion market as new rules promise to cut risk

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Europe’s biggest asset manager Amundi launched its majority-owned wealth management venture in Shanghai recently, becoming the first foreign company to do so

A shake-up of the rules around wealth management in China designed to eradicate risks that previously plagued the sector has helped smooth the way for foreign players

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Amundi launched its majority-owned wealth management venture in Shanghai on September 30, becoming the first foreign company to do so. Photo: Amundi

Daniel Ren

Published: 5:45pm, 8 Oct 2020Updated: 10:58pm, 8 Oct 2020

A shake-up of the rules around wealth management in China designed to eradicate risks that previously plagued the sector has helped smooth the way for foreign players keen to tap the enormous market, according to Europe’s biggest asset manager.

Amundi launched its majority-owned wealth management venture in Shanghai on September 30, becoming the first foreign company to do so.

The French asset manager owns 55 per cent of the venture, known as Amundi BOC Wealth Management, while Bank of China holds the remainder.

“It’s obvious that we have to be present in this market,” said Julien Fontaine, Amundi’s head of partnerships. “We want to be part of the development of China’s wealth management market.”

In April 2018, the People’s Bank of China, the mainland’s central bank, published guidance that required banks to remove “implicit guarantees” on principals and return rates, a move aimed at eradicating irregularities and introducing professional asset management skills to the banks offering the products. The new rule was originally scheduled to take effect at the beginning of 2021, but has been postponed by a year because of the coronavirus.